Sunrise of Cooperation: Crafting a Global Energy Cooperation through Cross-Border Electricity Trade

We are like tenant farmers chopping down the fence around our house for fuel when we should be using Nature's inexhaustible source of energy – Sun, wind and tide… I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait until oil and coal run out before we tackle that ~ Thomas Edision

The world is currently in a critical moment; on the one hand, we face diminishing fossil fuel resources and, on the other hand, a pressing necessity for a shift towards sustainable energy. In 2020, fossil fuels, renewable energy (mostly hydro, wind, and solar), and nuclear energy comprised 83%, 12.6%, and 6.3% of the world's total energy consumption (Holechek et al., 2022). To meet increased energy consumption by 50%, renewable sources, particularly solar energy, could be the most promising. Nevertheless, solar adoption poses three significant challenges: security, sustainability, and sovereignty. This paper focuses globally on the scarcity of solar energy adoption due to intermittency and reliability issues( (Md, 2023).

In light of these challenges, this paper proposes the formation of – Global Energy Cooperation, an umbrella organization between countries to unite to harness solar energy collectively, transcending geographical constraints. This paper proposes two proposals: (i) Implementation of CBET: Cross-border electricity trade and (ii) Attain a global Interconnected electricity grid in line with One Sun, One World to achieve a sustainable and interconnected global energy future.

Current Challenges

Solar energy is the most abundant energy resource on earth --173,000 terawatts of solar energy strikes the Earth continuously. That is more than 10,000 times the world's total energy use. (Chandler, 2011). However, technological, financial, and political viability has hindered large-scale adoption.

1. Variability: Geographical Disparities in Solar Irradiance

Solar energy utilization has a notable obstacle arising from the unequal dispersion of sunshine worldwide. Regions' proximity to the equator sees a greater intensity of sunlight, rendering them optimal for solar power generation. In contrast, areas at higher latitudes experience reduced solar irradiance, limiting the efficiency of solar panels. According to a report by the International Energy Agency (IEA), this geographical variability poses a substantial hurdle to the widespread adoption of solar energy (The Verge). In total, 93% of the global population lives in countries where the average daily photovoltaic(P.V.) potential ranges between 3 and 5 kWh/kWp. Around 20% of the global population in 70 countries have excellent conditions for P.V., where the long-term P.V. Output average exceeds 4.5 kWh/kWp per day. (Suri et al., 2020)

2. Intermittency and Nighttime Energy Needs:

The inherent intermittency of solar power generation further compounds the challenges. Solar panels produce electricity during the daytime, making nighttime a period of diminished energy production when energy needs are at peak. For example, Electricity consumption typically cycles each day, with the lowest demand occurring around 5:00 a.m. and the highest demand occurring at some point during the day (depending on the season). Electricity consumption in the summer increases rapidly through the day along with temperature, reaching its maximum around 5:00 p.m. or 6:00 p.m. Average U.S. hourly electricity load peaks during the summer (Hodge, 2020). This presents a critical obstacle to ensuring round-the-clock electricity. (Mahajan et al., 2023)

3. Technological and Infrastructural Barriers:

The Technological and infrastructural limitations are the reason for the slow adoption of solar energy. The development and adoption of solar technologies require huge investments. In 2022, $2.8 trillion has been invested in energy, out of which $1.7 trillion has been invested in clean energy. In 2022, for every dollar spent on fossil fuels, $1.70 went to clean energy. However, by 2030, we need $3.4 trillion for clean electrification (Crownhart, 2023). The existing power grids are inadequate to handle the integration of large-scale solar energy, and significant infrastructure upgrades to facilitate the seamless integration of solar energy into the existing grid system are needed (Dvorak, 2022).

4. Policy and Regulatory Frameworks:

The complex landscape of policies and regulations further hinders the rapid expansion of solar energy. Divergent policies across nations create uncertainties for investors and developers. To overcome these challenges, a comprehensive global approach is essential. The UK-India Green Grids Initiative, as reported by the U.K. government, signifies a step towards international collaboration in overcoming regulatory challenges (U.K. Government, 2021).

5. Economic Viability and Affordability:

While solar energy has the potential to fulfil all our energy needs, the initial costs of $3-4 trillion till 2050 are associated with solar installations, which makes the adoption difficult. Particularly for developing nations, Economic viability and affordability remain key challenges; bridging this gap requires innovative solutions and global cooperation. Globally, forecasts suggest that investment in grids will need to double to meet net-zero CO2 emissions by 2050. This equates to at least $21.4 trillion worth of investment, with $4.1 trillion required to sustain existing grid infrastructure and the remaining $17.3 trillion to expand the Grid to accommodate new electricity generation and consumption(Owusu,2023). 

Proposed Solution

1. Cross-Border Electricity Trade

The vision of Global Energy Cooperation materializes in the form of Cross-Border Electricity Trade (CBET), a cooperative approach to international energy sharing. To solve geographical disparities in solar irradiance, variability and intermittency, CBET aims to create an interconnected cross-border global electricity grid, facilitating the seamless trade/exchange of solar energy across nations, ushering globalization of electricity.

Integration of Global Electricity Grid:

The implementation of CBET requires the integration of a global electricity grid. By connecting disparate national grids into a unified system, nations can efficiently share surplus solar energy with those experiencing lower solar exposure. Further, it also solves the problems of intermittency as it offers an opportunity to use solar energy 24 hours a day even when the sun is not shining over us because it is shining somewhere else on the globe. This integration demands substantial infrastructural investments of $1 trillion in solar investment by 2030 and international collaboration from governments and multilateral institutions, but promises to address the geographical limitations of solar power generation (Bhaskar, 2021).

Inter Sea Grid: The Role of Submarine Power Cable

To further enhance the efficacy of CBET, an Inter Sea Grid is proposed. Various countries have invested substantially in the research and development of submarine power cable networks to transport renewable energy. The U.K. recently approved a power grid project worth over $2.27 billion to install a 190km subsea electricity superhighway for transporting power from Scotland to England. Denmark is launching its Viking Link submarine cable(1400 MW) to export clean wind energy from Denmark to the U.K. The demerit is, however the cost, as, the cost of submarine cables varies quite a bit, with communication submarine cables typically costing between $30,000 and $50,000 per km and submarine power cables costing over $2.5 million a km (Bradstock & Taleb, 2023)

2. One Sun, One World, One Grid: A Step Toward Cross Border Electricity Trade

The International Solar Alliance was conceived as a joint effort by India and France to mobilize efforts against climate change by deploying solar energy solutions. At present, 116 countries are signatories to the ISA Framework Agreement. Complementing the CBET initiative is ISA's ambitious concept of One Sun, One World, One Grid (OSOWOG). This is the first tangible initiative which envisions a unified global power grid powered by solar energy, transcending national borders and leveraging the collective potential of sunlight-rich regions.

Global Implementation of OSOWOG:

The vision behind the OSOWOG initiative is the mantra that "the sun never sets". OSOWOG has gained momentum globally with initiatives such as the Green Grids Initiative. In 2021, the GGI was launched in partnership with One Sun One World One Grid (OSOWOG) during the COP26 World Leaders' Summit. Prime Ministers of the U.K. and India jointly adopted the One Sun Declaration, endorsed by 92 countries. This declaration established the partnership between the two initiatives to tackle the global challenge of a powered future: how to build and operate electricity grids capable of absorbing and transmitting variable renewable while meeting growing power demands sustainably, securely, reliably, and affordably (Green Grids Initiative, n.d.)

Small Steps towards CBET

Several nations have already embarked on smaller-scale versions of cross-border electricity trade showcasing the feasibility of OSOWOG.

• USA-CANADA: The U.S. and Canadian electric power grids are connected by 35 transmission lines from New England to the Pacific Northwest. In 2020, 26 states imported electricity from Canadian provinces, with more than 1 million MWh of electricity being transmitted to eight states in the USA. Further, Several new cross-border transmission lines have been proposed. For example, the Champlain Hudson Power Express is a 1,000 – 1,250 MW high-voltage direct current (HVDC) transmission line from the Canadian border to New York City, expected to go into service in 2025 (Vine, 2021)

A study from MIT demonstrates the favourable cost implications of implementing this type of trading relationship. 4 G.W. of new transmission capacity from Quebec to New England and New York could save $2.4 and $3 billion a year, respectively. (Vine, 2021)

• Indian Subcontinent: India, Nepal, and Bangladesh are working on a trilateral power trade deal where Nepal will supply up to 500 MW of hydropower to Bangladesh using India's transmission line. Further, Nepal and India have agreed to set the target to reach 10,000 MW of electricity export to India in the coming decade. However, the energy source is hydropower, not solar (CHAUDHURY, 2024).

3. Overcoming Technological and Regulatory Barriers

The successful implementation of CBET and OSOWOG hinges on addressing technological and regulatory challenges. Initiatives such as the Green Grids Initiative and the commitment made at COP26 emphasize overcoming these barriers to facilitate the global transition to solar energy. While there is a need for global regulations, few regional-level policies are being formulated; while only partially focused on solar, they could become a guiding principle to achieve CBET.

EU Taxonomy:

The E.U. Taxonomy is a framework developed to help project developers and investors navigate the transition to a low-carbon, resilient, resource-efficient economy. It sets technical screening criteria that guide what investments constitute green finance. The principles for the technical screening criteria for electricity transmission and distribution include to 

• Support the integration of renewable energy into the power grid.

• Support the transition from carbon-intensive energy supply via electrification and the parallel development of low carbon power generation capacity.

• Support grid management technology used for integrating low carbon emission generation and demand-side energy savings 

CBET can be achieved in 3 ways. Each way does have regulatory issues and involves different levels of cross-border coordination. CBET types include: 

• Tenant generation: Here, a generator exports power to another country over a dedicated cross-border transmission line with little or no connection to the host country's system.

• A bilateral contract: Here, power moves through both national networks and across transmission interfaces linking the two grids. 

• An integrated market: Here, cross-border trades and all other power flows are optimized simultaneously over multiple networks. (Schroeder, 2019)

Research and Development

Investing in research and development is paramount for overcoming technological barriers. In 2021, the solar energy value chain has attracted investments of USD ~220 billion. United States of America, China, Vietnam, Japan, Spain, South Korea, Australia, Italy, Germany, and India; these economies together accounted for 79% of total solar investments (International Solar Alliance, n.d.). The corporate funding in the global solar sector rose 55% to 28.9 billion during January-September 2023, mainly due to the push to meet energy transition objectives, said Mercom Capital (Economics Times, 2023).

Conclusion

In forging a common future powered by the sun, this is just the beginning. The challenges of depleting fossil fuel and the scarcity of solar energy adoption demand not just tweaking changes but an unwavering commitment to change.

Global Energy Cooperation, encapsulated in Cross-Border Electricity Trade (CBET) and the concept of the One Sun, One World, One Grid initiative, stores the potential to unlock a new era of a Globalized electrified world. The successes witnessed in small-scale ventures illuminate the possibilities of a solar-powered future. The possibilities are limitless, and the goal of One Sun, One World, One Grid with CBET will pave not just the course of future energy but the trajectory of global unity.

In conclusion, the essay is a call to action for nations to join hands, transcend obstacles, and collectively script a solar-powered future of a united world.

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